Local Chinese longs down sharply, may stabilize this week

As of April 1, average Chinese domestic rebar and wire rod prices have indicated a downtrend amid the weakened market expectations as demand has failed to improve as much as expected. However, market sources believe that this week prices will stabilize.

The average rebar price has decreased by RMB 133/mt ($18.7/mt) compared to March 25, while the average 6.5 mm HPB 300 wire rod price has seen a decline of RMB 150/mt ($21.0/mt). Rebar prices have moved down by RMB 27/mt compared to Friday, March 29.  

During the given week, rebar and wire rod prices have moved down sharply as together with lower-than-expected demand, the raw material prices have been moving down and the cautious sentiments have been prevailing. Even though the steelmakers’ production outputs will unlikely see big declines in short term, downstream users will likely build up certain stock ahead of the Tomb Sweeping Day (April 4-6), thereby inventory of rebar and wire rod may decline in the near future, which will bolster their prices to a certain degree. It is expected that rebar and wire rod prices in the Chinese domestic market will likely fluctuate within a limited range in the coming week.

As of April 1, rebar futures at Shanghai Futures Exchange are standing at RMB 3,456/mt ($505mt), decreasing by RMB 129/mt ($10/mt) or 3.6 percent since March 25, while up 0.23 percent compared to the previous trading day, March 29.  

Average domestic rebar and wire rod prices in China's main markets are presented in the tables below.    

Rebar prices in local markets

All prices include 13 percent VAT and all prices are ex-warehouse.

Wire rod prices in local markets

All prices include 13 percent VAT and all prices are ex-warehouse.

$1 = RMB 7.0938